How to Report Income
Your household income affects the plans and savings you qualify for. It is important to update your income in your account if it changes. Doing this ensures you get the best plan and savings for your current situation.
Reporting income can be confusing. We have answered some frequent questions below to provide some clarity.
What Income Do I Report?
Report the income of each adult that is covered on your plan. This income determines the plans and savings you qualify for.
Here are some examples of what you should report:
- Salary, wages, tips and commissions
- Self-employment income (minus business expenses)
- Unemployment compensation
- Title II Social Security benefits (including retirement, disability and benefits for survivors)
- Rental income
- Dividends and royalties
What Income Do I Not Report?
Washington Healthplanfinder only asks for types of income needed to calculate your eligibility. Not all income counts towards this. If you do not see space for a certain type of income, you do not need to enter it. These types of income do not need to be reported:
- Cash assistance from other agencies
- Supplemental security income (SSI)
- Child support payments
- Time loss benefits
- Title IV-E and state foster care payments
- Some veteran’s benefits
Do I Report Income for Dependents?
Only report a dependent’s income if it meets the tax filing threshold. The tax filing threshold determines if a person can file a tax return. This applies whether the dependent files a tax return or not.
These are the current tax filing threshold requirements.:
- Earned income is equal or greater than $12,000,
- Unearned income is equal or greater than $1,050 or
- Earned and unearned income add up to the larger of the below amounts.
- Earned income plus $350
How Do I Report Income that Changes Month to Month?
Washington Healthplanfinder asks for your income from the current month when you sign up for a health plan. There are a few ways you can report income that changes month to month.
Report your actual income for the current month. If you do this, you can report your new income amount when it changes.
Report your average monthly income. Take your annual income and divide it by twelve. This will be your average monthly income.
Ramona is applying for health coverage. She works three months per year and makes $4,000 each month she works. She can report her income two ways:
- Ramona can report her actual income for this month: $4,000. She does not work next month. Ramona will have to report a change of income next month. She will report $0.
- Ramona can report her average income: $1,000. She makes $12,000 every year she works. She divides her yearly income by 12 to get her average monthly income.
Keep Your Income Current
Let us know when your monthly income changes by $150 or more. If your income decreases, you may qualify for more savings. If it increases and you do not update your income, you may have to pay back tax credits.
How Do I Report My Income If I Am Self-Employed?
Report your net income for the current month if you are self-employed. Your net income is the total amount of money you earned minus money you spent because of your job. Here are some examples of expenses you can subtract:
- Job-related transportation costs (not related to your commute)
- Wages and fringe benefits you give your employees
- Property, liability or business interruption insurance
- Interest (including mortgage interest paid to banks)
- Legal and professional services
- Rent or lease of job-related property and utilities
- Commissions, taxes, licenses and fees
- Contract labor
- Repairs and maintenance
- Certain travel and meal costs
Refer to IRS instructions on Schedule C, E, F, 1065 and 1120 tax forms for allowable expenses.
How Do I Report Deductions?
Deductions are life-related costs that you can subtract from your total income. This gives us a better idea of how much you make after these costs. Washington Healthplanfinder will subtract certain deductions when you report your income.
Deductions you can subtract include:
- Tuition and other school fees
- Educational expenses (up to $4,000 a year)
- These are tuition and fees that are paid out-of-pocket. These do not include cost of living, activity fees, personal expenses or costs paid by scholarships, grants or other financial aid.
- Student loan interest
- Educator’s expenses (up to $250 a year)
- Moving costs for active-duty military due to an official relocation
- Licensed educator’s expenses for unreimbursed items (books, supplies and other equipment)
- Health savings account (a deductible amount put into a savings account for medical costs)
- Individuals can deduct up to $3,350 a year
- Families can deduct up to $6,750 a year
- Health insurance costs for self-employed people
- Spousal support and alimony paid (not child support)
- Does not apply to divorces finalized after Jan. 1, 2019
- Amounts put into a pre-tax retirement account
How Is Income Verified?
Washington Healthplanfinder verifies that the income you report is correct. We use data from Social Security and other federal agencies to do this.
There are times we cannot verify income with this data. If this happens, we will contact you to request more information. We will give you a deadline when we do. You must submit the requested information by the deadline to keep your coverage.